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CONSUS Real Estate AG: Consus Real Estate AG Has a Successful First Half 2019 - Demonstrating Our Strong Growth and Significant Deleveraging

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Consus Real Estate AG ("Consus", ISIN DE000A2DA414, CC1), the leading property developer in Germany's top 9 cities, today released the figures for the first sixth months of 2019.

In the first six months of 2019, Consus achieved a total revenue of EUR 256 million, and an overall performance of around EUR 333 million, with the majority being attributable to real estate development. Our key performance indicator EBITDA pre PPA and pre-one offs ("Adjusted EBITDA") reached EUR 138 million as of 30 June 2019 (H1 2018: EUR 57 million) and resulted in an Adjusted EBITDA margin of 54%, and growth of over 140%. Reported EBITDA was EUR 116 million as of 30 June 2019 (H1 2018: EUR 41 million).

The adjusted last 12 months EBITDA pro forma for the SSN acquisition ("Pro Forma LTM Adjusted EBITDA") amounted to EUR 303 million (FY 2018: EUR 253 million), and was a total of EUR 408 million pro forma for the successful upfront sale in July 2019 ("Pro Forma LTM Adjusted EBITDA post sale"). This is a significant increase on the Pro Forma Adjusted EBITDA of EUR 253 million as of 31 December 2018, and reflects the strong growth of the business on a like-for-like basis.

Pro Forma LTM Adjusted Net Income was EUR 78 million, and reported Net Income was EUR 4 million (H1 2018: EUR 3 million) with the positive developments due to increased revenues and profits offsetting higher net financial expenses of EUR 107 million (H1 2018: EUR 68 million) due to increased debt, including the SSN acquisition and the bond issuance.

Strong deleveraging of the business as profitability increases

Pro forma for the successful upfront sale which closed in July 2019, the leverage would be 5.7x as of 30 June 2019, reflecting the positive impact of increased EBITDA and reduced Net Debt. This significant decrease highlights the excellent progress made in the deleveraging of the business, and the underlying strength of the Consus group and its development portfolio.

Net debt/Pro Forma LTM Adjusted EBITDA as of 30 June 2019 is 8.3x, with the reduction due to the increase in EBITDA, offset by the increase in Net Debt, compared to Q1 2019. This is a reduction of 0.4 x versus the leverage as at Q1 2019 pro forma for the bond issue of 8.7x.

Net debt increased to EUR 2,503 million as of 30 June 2019 (Q1 2019: EUR 2,276 million pro forma for bond issuance and EUR 2,171 million as reported), with a EUR 114 million increase due to acquisitions and the remainder due to construction activities and corporate costs netted against debt repayments. Net debt pro forma for the upfront sale is EUR 2,341 million.

Consus' equity amounted to EUR 1,108 million as of 30 June 2019 (FY 2018: EUR 1,161 million).

During Q2 2019, Consus successfully issued a senior secured corporate bond with a total nominal amount of EUR 400 million. The rating agencies Fitch and Standard & Poor's rated Consus B and the notes B and B-, respectively. This was a key milestone in Consus' long-term financing strategy of utilising the capital markets to reduce the cost of its project financing.

Reduction of average interest rate

The average run-rate interest rate is now 7.9%, taking into account recent attractive refinancings at development projects in Berlin, Frankfurt and Hamburg, and the sale in Leipzig. The refinancings and repayments reduced the rate from 8.5% as at 30 June 2019, which reflected the impact of the bond issue. This compares to a level of 8.1% as at 31 March 2019 prior to the bond issue.

In the second half of the year, the company expects to further reduce the average interest rate through the refinancing or repayment of approximately EUR 250 million of mezzanine debt. Consus has a target of reducing the average interest rate by 200 basis points in the medium-term, and has taken significant steps in that direction.

Continued growth in development and in the development portfolio

As of 30 June 2019, and adjusted for a further signed acquisition in Q3 and the sale in Leipzig, the total GDV has increased to EUR 10.0 billion, from EUR 9.6 billion as of 31 March 2019, with the total number of development projects increasing to 68 and a total area to be developed of 2.2 million m², demonstrating the company's continuing ability to grow the project pipeline.

The volume of projects forward sold amounted to EUR 2.8 billion as at 30 June 2019, corresponding to 28% of the development portfolio in terms of GDV, following the signing of a further letter of intent. Projects forward sold includes executed forward-sale agreements, letters of intent agreed and under negotiation and condominiums sold to private purchasers. In addition, Consus is targeting total upfront sales of around EUR 1.8 billion, with the sale of a project in Leipzig with a GDV of EUR 884 million now closed, and with a further upfront sale under LOI, which it expects to sign in Q4 2019 and to close in H1 2020.

Regarding development project acquisitions, the Consus group has agreed the purchase of four projects with a GDV of EUR 1.2 billion in 2019. The new development projects are "Benrather Gärten" in Düsseldorf with a GDV of EUR 700 million, the "Wachendorff Quartier" in Bergisch Gladbach (Cologne area) with a GDV of EUR 150 million and the "Braugold-Quartier" in Erfurt (Leipzig area) with GDV of EUR 82 million signed in the first six months of 2019. Subsequent to the reporting date, the acquisition of the "Otto-Quartier" in Wendlingen (Stuttgart area) with a GDV of EUR 275 million was signed.

Development of the group

Following the expansion of our portfolio to become the leading project developer in the top 9 cities of Germany, we have advanced on our plan to further integrate SSN Group. Consus has renamed SSN Group AG to Consus Swiss Finance AG as part of the integration process following the acquisition at the end of 2018. In the future, SSN Group AG and its subsidiaries will operate uniformly under the CONSUS brand. SSN Group AG has been operating as Consus Swiss Finance AG since the end of August 2019. The project developments of the former SSN Group AG will be managed by Consus Development GmbH going forward. In addition, during the second quarter of the year the direct ownership in CG Gruppe AG increased from 65% to 71%.

Guidance confirmed

Consus continues to target an Adjusted EBITDA of EUR 450 million in 2020 and an Adjusted EBITDA margin of around 20% in the medium term. Consus also intends to reduce its Net Debt/Adjusted EBITDA to approximately 3x in the medium term. Consus provides targets for Adjusted EBITDA as this reflects the underlying performance of the business prior to fair value accounting adjustments and one-off effects.

Andreas Steyer, CEO of Consus Real Estate AG, comments: "The first half of 2019 was another key stage in the development of Consus. Our business continued to grow strongly, and we successfully took important steps to optimise our capital structure and reduce our cost of debt. The second half of 2019 will continue to exhibit strong growth, and we are well positioned to achieve our strategic and economic goals in the financial year 2019 and beyond as planned."

The report for the first six month of 2019 has been published on Consus' website under investors/ financial reports and presentations (https://www.consus.ag/financial-reports-presentations-2019).

Invitation to the conference call on 12 September, 2019

The Management Board of CONSUS Real Estate AG invites all investors and interested parties to the results presentation of the first half of 2019 in a telephone conference on 12 September, 2019 at 14:00 (CET). The results presentation will also be broadcast live via webcast. Please use the link https://webcasts.eqs.com/consus20190912/no-audio

A presentation of the results will also be available for download on our website

https://www.consus.ag/financial-reports-presentations-2019?lang=en.

For the audio broadcast, please use the dial-in numbers listed below

Germany: +49 (0)69 2222 2018

United Kingdom: +44 (0)330 336 9411

United States: +1 929-477-0448

France: +33 (0)1 76 77 22 57

Switzerland: +41 (0)44 580 1022

PIN: 7726772

About CONSUS Real Estate AG

Consus Real Estate AG ("Consus") with its headoffice in Berlin is the leading pure-play property developer in the top 9 cities in Germany with a gross development value of EUR 10.0 bn. The Company focuses on residential property and specialises in the development of entire neighbourhoods ('quartiers') and standardised flats. The use of forward sales to institutional investors and the digitalisation of construction processes allow the Company to operate along the entire property development value chain. Consus implements projects - from the planning phase through to construction and transfer of ownership, as well as property management and the associated services. Consus' shares are listed in the Scale segment of the Frankfurt Stock Exchange and m:access segment of the Munich Stock Exchange and are traded on XETRA in Frankfurt, among others.

Language:

English

Companies:

CONSUS Real Estate AG

Kurfürstendamm 188-189

10707 Berlin

Germany

Phone:

+49 (0) 30 965 357 90 300

E-mail:

info@consus.ag

Internet:

www.consus.ag

ISIN:

DE000A2DA414

WKN:

A2DA41

Listed

Regulated Unofficial Market in Dusseldorf, Frankfurt (Scale), Munich (m:access), Stuttgart,

Tradegate Exchange

EQS News ID:

872433

Contact information

Investor Relations
Robert Stierwald
Interim Head of Investor Relations
investors@consus.ag
+49 30 965 357 90 260

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